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Reliance Retail to ramp up online groceries business

LiveMint logoLiveMint 11-07-2017 Sapna Agarwal

Mumbai: Even as the world’s largest etailer Amazon.com Inc. prepares to enter the food retail business in India, Mukesh Ambani-led Reliance Industries Ltd’s retail arm Reliance Retail is confident of becoming India’s top online grocery retailer by 2020, said a senior company executive.

“The full stream action on home delivery will be seen this year. The design will feed off from our store network,” said Damodar Mall, chief executive officer, Reliance Retail, which runs cash and carry retail under Reliance Market—super market chain Reliance Smart, neighbourhood food and groceries chain Reliance Fresh and online store Reliancesmart.in.

The online foray will be supported by its Jio broadband services. “The first phase of Jio was rapid establishment of consumer base and network. Now the synergies will kick in. Jio will differentiate us as a retailer this year,” said Mall.

The company’s online journey began nearly two years ago with Reliancefreshdirect.com which got rebranded to Reliance Smart.in last year. The retailer offers online services through phone, web, and app in parts of Mumbai, Bengaluru and Pune. In March, the company has also announced a tie-up with food and groceries etailer Grofers India Pvt. Ltd that operates mobile and web-based platform Grofers for 14 cities.

“What we have seen with the online pilot is the total purchase from the family has gone up,” said Mall, who did not divulge specific numbers, but hinted at the scale the company would get instantly once it decides to go national.

The good and groceries business of Reliance Retail has over 500 Reliance Fresh stores across 80 cities, 77 Reliance Smart stores and more than 40 Reliance Market stores across 37 cities. Across formats the retailer has stores across 702 cities with an area of over 13.5 million square feet which includes 344 Trends stores across 186 cities and 1996 Digital stores, according to the company’s annual report.

For the financial year 2017, Reliance Retail’s grocery retail consumption basket had a 32% revenue share of the Rs33,765 crore total turnover of the retail business. This constituted over Rs10,825 crore in value terms, according to a company spokesperson.

On Monday, the Department of Industrial Policy and Promotion (DIPP) approved e-commerce giant Amazon’s $500 million proposal for food retail in India. In all, the government received investment proposals worth $695 million from three companies—Amazon, BigBasket and Grofers.

Also Read: Amazon gets govt nod to invest in food retail in India

Amazon India has been piloting groceries delivery since February last year through an app called Amazon Now. Since then, Amazon has grown the category rapidly and challenged the status quo of established incumbents such as BigBasket and Grofers, which are struggling to prove that their businesses are sustainable in the long run, a Mint report said.

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